PROJECT MANAGEMENT FOR RENOVATING A HOSTEL

Department Of Business Administration

Turiba University

Professor Ivars Linde

Prepared By: Abens Anna JacobGroup: UMA1V22

CONTENT

1. Project Summary

1.1 Project Scope1.2 Project Justification and Main Problem1.3 SWOT Analysis

2. Alternatives

2.1 Evaluation of Alternatives2.2 Choosing the Best Alternatives

3. Development of Concept (WBS)

3.1 Workbreak down Structure – Alternative A 3.2 Workbreak down Structure – Alternative B 3.3 Schedule Planning 3.3.1 CPM for Alternative A 3.3.2 CPM for Alternative B

4.1 Cost Estimates for Alternative A (with Gantt chart) 4.1.1 Cost Estimates for Alternative B (with Gantt chart)

5. Comparison of Profitability

6. Strategic Analysis

7. Risk Analysis

7.1 Conclusion about selecting best alternatives

8. Project Description

9. Conclusion

1. PROJECT SUMMARY:

The basic idea is to initiate and develop this project is mainly based on the merging needs of stay in Riga. It has been observed that now a day more and more trend of hostelling has been found in twin cities. Hence, it’s creating a business opportunity for many organizations in the near future it’s gone be a profitable business field.

According to the data of the Central Statistical Bureau (CSB) in 2015, 2.1 million foreign visitors stayed in Latvian accommodation establishments, which is 2.0 % more than in 2014. As compared with 2014, the number of foreign visitors grew by 3.1 %, reaching 1.5 million. The average length of a stay of foreign visitors in accommodation establishments was 2 nights.Of all foreign visitors “79.1% stayed in Riga”, 8.2 % - in Jūrmala, 1.7 % - in Sigulda county, 1.5% - in Ventspils, 1.5% - in Liepāja.

Although the issue of safety and security remains the primary reason which keeping people to avoid hostel. As the recent trend shows that people are gaining more confidence about staying in hostel especially solo travelers. From 2011 to 2014, for example, SITA World Tours’ solo traveler bookings increased by nearly 64%, generating an increase of more than 90% in sales, the company said. Although a good hostel should present the following factors to the customers for better usability:

* 24 hour reception;* Transfer from/to airport * Laundry facilities * Printing * Two common rooms;* Party room;* Fully equipped kitchen;* City maps;* Wi-Fi;

* TV & DVD;* Personal Computer;* Tourist Information;* Hairdryers;* Iron and ironing board;* Hot beverages and milk;* Board games;* Parking place;* Book exchange shelf;* Lockers;* Front door keys;* Luggage storage;* Bed linen;* Towels;* Slippers;* Baby cot;* Ear plugs;* Bicycle rent (seasonal)

1.1 PROJECT SCOPE:

Since most people only rate a hostel by it look, facilities, amenities and its location and etc… So it is important to select a good site which is really close to city and easy to connect with other places. Therefore, we have selected a place in Riga Town because it is really close to supermarkets, restaurants, the train station, the bus station, airport etc….

Renovating a 2 story – building to hostel requires a considerable amount of money. We need to make a good impression by choosing an exterior product and style that will give a good appeal to the hostel. So, it is very important to design the hostel in such a way that it can deliver all the needs of our customers. Total area covered for this project is 35,000 sq.ft. It is very important to decide how many rooms we want give for rent and how much spacious we need the room to be. Consider how much money you have in the bank and how much you are willing to borrow when deciding which floor plan to go for.

We can easily add more rooms in second floor by adding more room partitions and same time we can reduce the number of rooms by removing the partition. Which allow you to give more single occupancy rooms for solo travelers who prefer to stay alone.

1.2 Project Justification and Main Problem

One of the biggest problems which are often faced by the travelers is feeling lonely and getting lost in their way. Therefore it is important to offer them help in social and practical integration process by organizing cultural and social events in order to ensure that the travelers learns to adopt the new local necessities and becomes integrated into the new social network.

Anna Builders Pvt. LTD is a reliable construction company. Recently we have signed a contract of renovating a 2 story - building to hostel with modern facilities in Riga town with Mr. Frank Marc. Therefore Anna Builders (Pvt.) Limited will complete the renovation of the hostel as per the requirements and specifications provided by the client.

The duration decided for this project is 8 months with basement, first floor and second floor.

1.3 SWOT analysis

2. Alternatives

STRENGTH: Location Reasonable and Flexible

pricing Heritage & Museums Night life Transportation

WEAKNESS: Famous and busy destination Rely heavily on tourism Diversity Things you need to improve

OPPORTUNITIES: Business Hub Surge in tourist arrivial

THREATS: Pandemic issues Strong competion Seasonality

SWOT

For the attainment of the whole development of the project is influenced by the selection of the outstanding alternative which fits better into criteria such as budget, time management, etc. In the course of our research three convenient alternatives emerged that may meet the requirements of our client. In the process within the alternatives there is no distinction between different locations or transport companies etc., but rather between the project team. The three alternatives are described as follows:

Alternative A: The whole renovation will be well planned, designed and organized within the company with a project team. The team has to be determined.

Alternative B: Each distribute task of the construction of hostel to different organization, which has to be decided, made agreement and charged first. But the construction will be monitored by us.

Alternative c: The entire hostel will designed, planned and organized by ourselves

2.1 Evaluation of alternatives

BENEFITS LIMITATIONS COSTS RISKSA Chance to

distribution of task within the project team

Payment of wages to project team

Intermediate Diversity of project team

Difference of opinion within the team

B Better prices & service for the client.

Takes time to find an agency

Usually high commission costs

High If the agency does not meet the expectation

Chance of not finding an accurate agency

C Give us flexibility during the

Requires more time

Low Overload of workby over estimating our

entire procedure

own capabilities

2.2 Choosing the best alternatives

We decided not consider alternative B because

Time consuming High risk Close monitoring is needed Expensive

3. Development of concept

3.1 WORK BREAK DOWN STRUCTURE – ALTERNATIVE A.

3.2 WORK BREAK DOWN STRUCTURE – ALTERNATIVE B.

Hostel

1.1 Intiation

1.1.1 Contract

1.1.2 Project Planning

1.1.3 Requirement

Gathering

1.1.1.1 Selection Of Team

1..1.1.2 Hiring Of Skilled Person

1.2 Project Plan

1.1.3 Allocating a Project

team

1.1.4 Budgeting

1.1.5 Resource Allocation

1.3 Design

1.2.1 InteriorDesign

1.2.2 Exterior Design

1.2.3Design Approval

1.4 Construction

1.4.1 Electrical

1.4.2 Plumbing

1.4.3 Adding more room in second floor

by using partitions

1.4.4 Install Kitchen

1.4.5 Install Sanitary facilities

1.4.6 Lay floors

1.4.6 Put up Wall paers

1.4.7 Exterior Painting

1.5 Start - Up

1.5.1 Test Installion

1.5.2 Hire Staff

1.5.3 Move in

3.3 SCHEDULE PLANNING3.3.1 CRITICAL PATH ANALYSIS ALTERNATIVE A:

Hostel

1.1 Intiation

1.1.1 Contract

1.1.2 Project Planning

1.1.3 Requirement Gathering

1.2 Strategy

1.1.3 Resource planning

1.1.4 Budget Planning

1.1.5 Resource Allocation

1.3 Design

1.2.1 InteriorDesign

1.2.2 Exterior Design

1.2.3Design Approval

1.4 Construction

1.4.1 Electrical

1.4.2 Plumbing

1.4.4 Install Kitchen

1.4.5 Install Sanitary facilities

1.4.6 Lay floors

1.4.6 Put up Wall paers

1.4.7 Exterior Painting

1.5 Start - Up

1.5.1 Test Installion

1.5.2 Hire Staff

1.5.3 Move in

STAR

T

AB D E

FG J

KL N O PMH

IC

3.3.2 CRITICAL PATH ANALYSIS ALTERNATIVE B:

STAR

T AB C D

EF I

JK M N OLG

H

4.1 Cost Estimates for Alternative A:

Project TeamSalary/month Salary/Day

Working days

Net salary for Work days

Social Tax

Total salary with Tax

             Project Manager 800,00 26,67 24 640,08 128.02 768.1Assitant 400,00 13,33 25 333,25 66.65 399.9Designer/architect 600,00 20,00 10 200,00 40 240             Total       1173,33 234,67 1408,00                          

Internal Cost/dayWorking days

Net costs

Tax VAT

Total Cost  

             Electrical 250,00 10 2500,00 50,00 2550,00  Plumbing 300,00 13 3900,00 60,00 3960,00  Walls 112,00 8 896,00 22,40 918,40  Flooring 83,00 14 1162,00 232,40 1394,40  Install roof drains 200,00 4 800,00 160,00 960,00  Install tile in toilet rooms 50,00 3 150,00 30,00 180,00  Paint walls 40,00 6 240,00 48,00 288,00  Ceiling tile 200,00 5 1000,00 200,00 1200,00  Carpet 85,00 14 1190,00 238,00 1428,00  Install electrical fixtures 150,00 3 450,00 90,00 540,00  Install kitchen fixtures 75,00 3 225,00 45,00 270,00  Install sanitary fixture 60,00 3 180,00 36,00 216,00               Total         13904.8                                         

Event costs/day tax VATtotal costs      

             Transport 250,00 50,00 _      Decorations 40,00 8,00 _      Location 250,00 50,00 _      Pour 200,00 40,00 _      Steel columns 300,00 60,00 _      Beams 85,00 17,00 _                   Total Net 1063,33   Gross 1310,29               

             

Alternative A Start Date End Date

Duration in weeks      

  1.May.201624.July.2016 12      

Total Cost        16623.0

9  

4.1.1 COST ESTIMATES FOR ALTERNATIVE B:

Project TeamSalary/month Salary/Day

Working days

Net salary for Work days

Social Tax

Total salary with Tax

             Project Manager 800,00 26,67 35 933,45 186,69 1120,14Assitant 400,00 13,33 40 533,2 106,64 399,9Designer/architect 600,00 20,00 10 200,00 40,00 240,0             

Total       1666,65 333,33 1760,04                          

Internal Cost/dayWorking days

Net costs

Tax VAT

Total Cost  

             Electrical 100,00 15 1500,00 300,00 1800,00  Plumbing 110,00 18 1980,00 396,00 2376,00  Walls 60,00 12 720,00 144,00 864,00  Flooring 83,00 14 1162,00 232,40 1394,40  Install roof drains 200,00 4 800,00 160,00 960,00  Install tile in toilet rooms 50,00 3 150,00 30,00 180,00  Paint walls 20,00 10 200,00 40,00 240,00  Ceiling tile 200,00 5 1000,00 200,00 1200,00  Carpet 85,00 14 1190,00 238,00 1428,00  Install electrical fixtures 60,00 5 300,00 60,00 360,00  Install kitchen fixtures 30,00 7 210,00 42,00 252,00  Install sanitary fixture 15,00 8 120,00 24,00 144,00               

Total        11198,40  

                                       

Event costs/day tax VATtotal costs      

             Transport 250,00 50,00 _      Decorations 40,00 8,00 _      Location 250,00 50,00 _      Pour 200,00 40,00 _      Steel columns 300,00 60,00 _      Beams 85,00 17,00 _                   Total Net 1063,33   Gross 1310,29                            

Alternative A Start Date End Date

Duration in weeks      

  1.May.201608.Oct.2016

22 W 6D      

Total Cost        14268,73  

5. COMPARISON OF PROFITABILITY

Alternative - A   2017 2018 2019 2020

           Income without tax                     Project development cost excl VAT

-16623.1        

           

Cash Flow-

16623.1 60000 80000 70000 85000Corporate Tax (15%)   9000 12000 10500 12750Cash without tax   51 000 68000 59500 72250           Total cash flow   34376.9 51376.9 42876.9 55626.9                      Discount Factor 10% 0.909 0.826 0.751 0.683

PV   31248.6 42437.332200.5

537993.1

7

NPV   14625.5 25814.215577.4

521370.0

7           Discount Factor 20% 0.83 0.694 0.579 0.482

PV  28532.8

3 35655.524825.7

226812.1

6

NPV  11909.7

3 19032.4 8202.610189.0

6           Discount Factor 30% 0.769 0.592 0.455 0.35PV   26435.8 30415.1 19508.9 25287.5NPV   9812.7 13792 2885.88 8664.4

IRR = r1 + NPVr1 (r2-r1)

NPVr1 – NPVr2

R1 = 0.1; R2 = 0.2

IRR = 63.8%

Alternative - B   2017 2018 2019 2020           Income without tax                     Project development cost excl VAT

-14268.7        

           

Cash Flow-

14268.7 50000 75000 83000 85000

Corporate Tax (15%)   7500 11250 12450 12750Cash without tax   42 500 63750 70550 72250           Total cash flow   28231.3 49481.3 56281.3 57981.3                      Discount Factor 10% 0.909 0.826 0.751 0.683

PV  25662.2

540871.5

542267.2

539601.2

2

NPV  11393.5

526602.8

5 27998.525332.5

2           Discount Factor 20% 0.83 0.694 0.579 0.482

PV   23431.934340.0

232586.8

727946.9

8

NPV   9163.220071.3

218318.1

713678.2

8           Discount Factor 30% 0.769 0.592 0.455 0.35

PV   21709.829292.9

2 25607.920293.4

5

NPV   7441.1615024.2

211339.2

9 6024.75

IRR = r1 + NPVr1 (r2-r1)

NPVr1 – NPVr2

R1 = 0.1; R2 = 0.2

IRR = 61.08%

4.1.2 TASK PLAN

6. Strategic analysis

Criteria Alternative A Weighted Score Alternative B Weighted

Score1. Observance of time

schedule 20% 4 0,8 3 0,6

2. Simultaneous processing of tasks 15% 4 0,6 2 0,3

3. Level of influence by stakeholders 10% 2 0,2 4 0,4

4. Provides appropriate 30% 3 0,9 5 1,55. Sponsorships 25% 5 1,25 5 1,25

100% 3,75 4,05

7. Risk analysis

SCALE LOW0-5

MODERATE6-10

SIGNIFICANT11-15

HIGH16-20

Alternative A

Typesofrisks Risks Evaluation Activity

economic

1. Delay in funds2. Wrong budget calculation 3. Underestimation in terms of

required time

4

1. Ongoing information exchange with sponsors

2. Rechecking event budget calculation

3. Observance of time management plan

social1.Decision-making without informing Stakeholder 1.5 1. Arrange regular stakeholder

technical1. Machinery does not work

properly 21. Purchase new machinery or

backup machinery

Alternative B

Types of risks Risks Evaluation Activity

Economic

1. Working overtime which leads to increased salaries

2. Delay in funds3. Wrong budget calculation

4.5

1. Monitoring the work progress and observance of time schedule

2. Time to time project progress update with stakeholders

3. Rechecking budget calculation

Social

1. Internal diversity within project team

2. Project Manager could take autonomous decisions

3

1. Conducting regular team meetings

2. Manager update project knowledge with other team members

technical 1. Inflation 21. Reserve extra material to

handle this risk

7.1 Conclusion about selecting best alternative

Alternatives economic social Technical sum

A 4 1.5 2 7.5

В 4.5 3 2 9.5

Project Description:

During the renovation of the building we can expect to accumulate many documents ranging from floor plans to inspirational photographs, product catalogs and design ideas. The Home Building Organizer is a flexible 3-ring binder that includes detailed budget worksheets, product ideas and organizational tools to assist in managing your entire home building process. This binder will prove to be invaluable in helping you stay organized. It also makes a great scrapbook.

When deciding on the design of hostel, we need to take note of the rooms and features the client included. Having all single occupancy rooms on the second floor also gives privacy and all double occupancy rooms on first gives easy accessibility. Consider all single

occupancy rooms on first floor which gives more flexibility and greater view of the city from balcony.

First Floor: 35000 Sq.Ft

No rooms: 6 double rooms

Second floor:

No rooms: 8 single rooms

The scope of this Project includes: • developing the construction plans, the grading plans and the landscape plans acquiring all required permits and approvals installation of the water well and a water system including a pump and all required piping installation of a properly designed and the garage with a parking area adequate for at least 6 average sized vehicles the parking area.

Title

Construction of a Hostel

Alternative A

Main Problem:

There are numerous important challenges facing today's construction industry. Some of the construction issues include workforce considerations, safety, time constraints, and the changing nature of the work. Non-construction challenges that construction industry faces that are part of the business landscape include legal issues, government regulations, environmental concerns, and socio-political pressures. Also in addition to these challenges, the construction industry is highly competitive, and firms must continually improve their productivity to remain competitive.  The identification of material, identifying materials moving flow in logistics and tracking materials location are needed for successful project management in construction.•A positive image of the construction industry as a career choice. •The transfer of skills from other sectors, such as agriculture, fishing, aquaculture and forestry, to the construction industry. •Local employers able to effectively compete for the large scale construction contracts.RealizationIn order to bring them together and to get to know each other it seems obvious to organize a special event for it. The fact that will not have many contacts in the beginning of construction will make it all the more important to get business use social media and online sites for marketing the hostel. The successful completion of this project depends upon the following external processes: The contracted Home Builders must complete construction of the hostel no later than the date to which they have agreed with the client.

Project duration(12 weeks, registration period excluded):

Starting:01.05.2016

Ending:24.07.2016

Project budget(€):20000.00 €

Total Costs:16623.09 €

Conclusion:

In the years ahead, the construction industry must has to overcome different challenges with respect to building environment, transportation, power or natural hazards. The Construction industry is comprised of clients, designers and contractors. But in the modern industrialized world, construction usually involves the translation of designs into reality. A formal design team may be assembled to plan the physical proceedings, and to integrate those proceedings with the other parts. The outstanding performance under demanding situations in the past will stand in good stead and give confidence to the construction industry to bring about an overall development in the infrastructure of the nation. The gains of large investments in the mega-projects eventually will feedback to the construction industry itself in the form of better economy and improved work conditions. As efficiency codes have come into effect in recent years, new construction technologies and methods have emerged. New techniques of building construction are being researched, made possible by advances in 3D printing technology. In a form of additive building construction, similar to the additive manufacturing techniques for manufactured parts, building printing is making it possible to flexibly construct small commercial buildings and private habitations in around 20 hours, with built-in plumbing and electrical facilities, in one continuous build, using large 3D printers.

In the current trend of sustainable construction, the recent movements of New Urbanism and New Classical Architecture promote a sustainable approach towards construction, that appreciates and develops smart growth, architectural tradition and classical design.